Pay for Performance Revives the Kibbutz

Israel's aging socialist communities, the kibbutzim, are being revived by a shot of capitalism - a major element of which is "differential salaries" or pay based on productivity - according to an article "The Kibbutz Comeback" featured in this week's U.S. News & World Report (September 29/October 6, 2008).  (Note that the article does not yet appear in the on-line edition; I will supply a link as soon as it does.)

The article describes the impact that this "bracing dose of capitalist individualism" has had on Kibbutz Degania, the oldest of Israel's 273 kibbutzim.

From the article:

Spread out across the highway from the Sea of Galilee, Degania is a forest of trees, bushes, and flowers dotted with little bungalows and smelling of freshly mowed gras.  Two years ago, life changed dramatically for members of this comfortable little community.  They stopped receiving equal pay regardless of the work they did (or, in many cases, didn't do) and started getting paid according to their productivity.  Nina Ben-Moshe, born here 70 years ago, recalls the impact:  'All these members who'd been staying home with back problems suddenly felt well enough to go back to work,' she chuckles.  The kibbutz's operating deficit vanished.  'There were a lot of parasites in the old days,' she says.  'It's not like that anymore.'

And specifically in reference to the implementation of performance or productivity based pay:

The advent of "differential salaries" and other reforms has brought a turnaround to the kibbutz movement, which had become a socialist subculture on the verge of economic and social collapse.  The average income on a kibbutz is now about on par with the Israeli national average.  Most kibbutzim offer enviable schooling, healthcare, old-age pensions, and cultural life.  And the drastic attrition of young people is being reversed.  From the mid-1980s to mid-2000s, an estimated 30,000 to 50,000 kibbutz members left the fold.  In the past three years, though, the hemorrhaging has stopped, with 2007 marking the first year in over a generation when there were more people joining the kibbutzim than quitting, according to the United Kibbutz Movement.

Interesting reward lessons from an unexpected place.

Creative Commons Photo: "Sunset over Shlomi - Kibbutz Matzuva Israel" by David King